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To enable Windows XP Mode, please follow these steps. First you will need to create a new virtual machine. From the start menu, click to browse All Programs, then hover over Windows Virtual PC. When the folder expands, click 'Windows Virtual PC.'
After the Windows Virtual PC window opens, click the button 'Create Virtual Machine.' The default options should be used.
When prompted to specify memory and network settings, ensure the options chosen match the image below.
When prompted to choose Virtual Hard Disk settings, choose 'Use an existing virtual hard disk.' the VHD will be located at C:\WindowsXPMode\Windows XP Mode base.vhd. Then press 'Create.'
From the start menu, click to browse All Programs, then hover over Windows Virtual PC. When the folder expands, click Windows XP Mode. This will begin the setup of Windows XP Mode.
Once the setup of Windows XP Mode is completed, you will be presented with the Window below. Before installing programs on the Windows XP Virtual PC, click the Start Menu and highlight 'My Computer.' Then Right-Click and choose 'Manage.' When the Computer Management window appears, on the left pane expand 'System Tools,' then 'Local Users and Groups,' and highlight the option 'Users.' On the right pane, highlight 'XPMUser' and choose 'Properties.' When the XPMUser properties window appears, uncheck the box next to 'Account is disabled' and click 'OK.'
With XPMUser still highlighted, Right-Click and choose 'Set Password.' Create a password for the XPMUser account, then click 'OK'.
Move your cursor to the menu for the Virtual PC and click on 'Tools,' than 'Enable Integration Features.' You will be prompted for your user name (XPMUser) and password. Complete this information and check the box 'Remember Credentials.' Then click OK.
Now click on 'Tools' again, but this time choose 'Settings.' Highlight the setting 'Close' and choose to 'Hibernate' when closing the Virtual Machine. Then press 'OK.' You may now use Windows XP Mode as if it were an actual Windows XP PC. Be sure to install anti virus software and the latest Windows Updates. You can exit the Virtual PC at any time by choosing 'Log Off XPMUser' in the Start Menu.
If you experience slow performance when trying to access a shared drive from the host PC within the virtual machine, download the attached hotfix and run it within your Windows XP Virtual Machine. WindowsXP-KB972435-x86-ENU improves slow performance when trying to open a redirected drive on a remote computer that is running Windows XP through a Terminal Services session; more information can be found here.
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